Serious Deficiencies in Nursing Facilities are Understated and the Problem May Get Worse

January 7, 2010

Nursing facilities that choose to participate in the Medicare or Medicaid programs, or both, must undergo an annual survey to determine their compliance with federal standards of care, which are called Requirements of Participation.[1] Facilities that are cited with deficiencies in the survey process are subject to a range of intermediate remedies, which are intended to sanction noncompliance and motivate facilities to achieve and maintain substantial compliance.[2] In numerous reports over the past decade, the Government Accountability Office (GAO) has found that the federal nursing home survey process describes deficiencies as less serious than they actually are.[3] The result of the understatement of deficiencies is either that no enforcement occurs at all or that less significant remedies are imposed than the deficiencies actually warrant.

A recent GAO report, for the first time, identifies the factors underlying state survey agencies' understatement of deficiencies. Problems in the survey and enforcement systems may increase in light of a recent Third Circuit Court of Appeals decision that directs the Centers for Medicare & Medicaid Services (CMS) to expunge immediate jeopardy[4] deficiencies that were not addressed during a facility's administrative appeals.

GAO Report on the Survey Process

The GAO's recent study asked surveyors and state survey agency directors nationwide about the survey process. In a report publicly released in December 2009, based on answers to the web-based questionnaires and the GAO's analysis of survey data, the GAO identifies four major factors that underlie nursing home surveys' understatement of serious deficiencies: (1) weaknesses in the federal survey process; (2) workforce shortages and training inadequacies; (3) state supervisory reviews; and (4) state agency practices that explicitly and implicitly discourage the citing of deficiencies and external pressure by the nursing home industry and state and federal legislators. GAO, Nursing Homes: Addressing the Factors Underlying Understatement of Serious Care Problems Requires Sustained CMS and State Commitment, GAO-10-70 (Nov. 2009), http://www.gao.gov/new.items/d1070.pdf.

Many of these factors confirm what residents' advocates have identified as problems in the survey process for many years. The GAO found that the timing of surveys remains too predictable to give a true picture of the quality of care provided by a facility. Survey respondents described guidance issued by CMS as lengthy, complex and subjective, and reported that the definition of "actual harm" deficiency is confusing to surveyors. These problems in the survey process have been exacerbated by inadequate survey budgets, particularly in the last decade, which have led to workforce shortages, insufficient training for surveyors, and reliance on inexperienced surveyors, who are more likely to understate the seriousness of deficiencies. A third factor is states' tending to focus their supervisory reviews on high-level deficiencies that may lead to sanctions, not on lower-level deficiencies, which may be understated.

Finally, the GAO identifies state survey agencies' non-citation practices, both explicit and implicit, that result in the understatement of deficiencies. These practices include not citing certain deficiencies at all, not citing deficiencies above a certain level of scope and severity, and allowing facilities to correct deficiencies without receiving any citation of noncompliance. Seven of 12 state survey agency directors reported external pressures – by the nursing home surveyed, the state nursing home industry, and state and federal legislators. State survey agency directors report being pressured to reduce or eliminate deficiencies, with pressure coming from legislative offices and the governor. State legislators and industry representatives have appeared on-site during surveys, questioning and intimidating surveyors. In addition, "unbalanced" informal dispute resolution practices have led to downgrading and deletion of deficiencies in several states.

For nursing home residents, the understatement of deficiencies may lead to poorer quality of care and quality of life. Facilities realize that deficiencies may not be cited at all and, if cited, that they will lead to only minimal enforcement actions. The nursing home industry will claim that care has improved when it has not. Finally, public attention will shift away from recognizing the need to strengthen and improve the nursing home regulatory system.

Recent Court Decision May Create Further Issues

A recent court decision may lead to further under-reporting of deficiencies by state survey agencies. In December, the Eighth Circuit Court of Appeals vacated a Departmental Appeals Board (DAB) decision that upheld an immediate jeopardy deficiency cited against an Arkansas nursing facility. The Administrative Law Judge (ALJ) who heard the appeal and the three-judge DAB panel that reviewed the ALJ's decision each addressed only one of the six jeopardy-level deficiencies cited against the facility by the survey agency. In oral argument before the Eighth Circuit, the facility said that unreviewed CMS findings of immediate jeopardy would remain accessible to the public and could be used to support damage claims against the facility; CMS did not dispute the statement. The court said, "If true, that is a material adverse impact, in which case all findings of immediate jeopardy that are appealed should either be upheld or reversed by the ALJ or the DAB or be expunged from the agency's public records." The Eighth Circuit panel ruled that since the ALJ and DAB each addressed only one of the six immediate jeopardy deficiencies, the five that were not addressed had to be expunged. Grace Healthcare of Benton v. United States Department of Health and Human Services, No. 08-3218 (8th Cir., Dec. 21, 2009).[5]

In the interest of judicial economy, many ALJs and DAB, at present, choose not to address all of the deficiencies that are cited by CMS. Instead, they focus on the limited number of deficiencies that are sufficient to sustain the remedy. The Eighth Circuit's decision rejects that approach for jeopardy-level deficiencies, requiring ALJs either to address those deficiencies or to expunge them from the public record. The decision may also discourage state survey agencies from citing multiple deficiencies, even though CMS guidance directs survey agencies to cite all relevant deficiencies, and may encourage state agencies to cite fewer deficiencies or to cite deficiencies at lower levels of severity, or both. If fewer deficiencies are cited, the nursing home industry will argue, again, that the quality of care has improved. The decision will also encourage facilities to appeal more deficiencies.

Conclusion

State survey agencies have understated nursing home deficiencies for many years. The GAO report confirms that understatement occurs and explains the causes. The recent decision by the Eighth Circuit Court of Appeals may make it even more difficult for serious quality of care deficiencies in nursing homes to be addressed.

[4] The federal survey process classifies deficiencies into four levels of severity and three levels of scope. The most serious deficiencies are called "immediate jeopardy." The second harm level is called "Actual harm." Two no-harm levels follow – no actual harm and substantial compliance. Surveyors often have difficulty distinguishing "actual harm" from "no actual harm with the potential for more than minimal harm." The scope of a deficiency may be isolated, pattern, or widespread. The scope and severity "grid" contains 12 boxes, with the lowest box reflecting isolated substantial compliance and the highest, reflecting widespread immediate jeopardy.